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US opens bidding for contracts worth $5 bn

Washington, Jan. 7 (Reuters): The US opened up bidding today for $5 billion in new contracts to rebuild Iraq, the first in a string of lucrative deals funded by $18.6 billion appropriated by the US Congress but barred to those nations who opposed the Iraq war.

After more than a month’s delay, the Pentagon-run Programme Management Office kicked off bidding by issuing solicitations overnight for 17 major construction contracts and project management deals to oversee the work.

“The RFPs (Request For Proposals) are out which means that contractors who are going to help our efforts to rebuild a free Iraq can now submit bids,” said a US defence official.

The Pentagon promised open competition, but the bidding for prime contracts excludes companies from nations that did not support the US decision to invade Iraq without UN approval, including France, Russia, Germany and Canada.

The US has drawn up a list of 63 eligible countries but says the list could be revised. Sub-contracts will be open to all nations.

The first round of contracts came under a barrage of criticism, with allegations of cronyism and favouritism over the award of work to well-connected firms such as Halliburton, the oil services company once run by Vice-President Dick Cheney.

All the Iraq contracts, which now must be competitively bid, are being closely watched by the General Accounting Office, the investigative arm of Congress.

Contracts are also under scrutiny by government auditors and a draft Pentagon audit last month said Halliburton may have been overcharged $61 million by a subcontractor for fuel. The Texas firm denies wrongdoing and says its prices were fair.

The 10 new prime construction contracts put on government websites (www.fedbizopps.gov) cover work in five sectors: electricity, water, security and justice, transportation and communications and buildings and health.

Retired Admiral David Nash, who is in charge of the Programme Management Office, said late yesterday bids were due in 30 days and he expected the work to be awarded by early March, a month later than initially expected. A pre-proposal conference will take place later this month.

Officials said the delay was caused largely by the decision to bring forward the hand over from the US to the Iraqi authorities to the end of June, which meant some contracts had to be reworked. Bidding documents stressed corruption would not be tolerated.

“Transactions relating to the expenditure of public funds require the highest degree of public trust and an impeccable standard of conduct by contractors, sub-contractors and any other agent,” the documents said.

Of the $18.6 billion appropriated by Congress, another $6 billion will be rolled out later for non-construction work, including equipment, democracy-building and grants.

About $4 billion will be held back in reserve. Roughly $2 billion will go into repairing the oil sector via two contracts to replace the no-bid deal given last March to Halliburton. Those are set to be announced before January 17.

Prisoner release

In what it called a gesture of reconciliation, the US-led administration in Iraq said today it would release more than 500 prisoners detained as low-level security threats over the past eight months.

At the same time, the authority said it would take a more aggressive approach to hunting down leading figures in Saddam Hussein’s regime still on its most-wanted list.

“It is time for reconciliation, time for Iraqis to make common cause,” Paul Bremer, the US administrator in Iraq, said, flanked by Adnan Pachachi, president of the governing Council, who praised the move.

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